Swedfund Affirms Continuous Financing of African Microfinance Specialist through Successive Loan
Platcorp Holdings Limited, a non-bank financial services company, has secured a $10 million debt deal with Swedfund, Sweden's development finance institution. This marks Swedfund's fourth investment in Platcorp, following earlier loans of $10 million in 2018, $5 million in 2020, and $15 million in 2022.
The investment aims to contribute to closing the financing gap in East and Southern African countries, where small businesses often lack access to formal credit. Platcorp's focus is on micro enterprises, with an average loan size of just $320.
Jakob Larsson, senior investment manager for Swedfund, stated that Platcorp's approach effectively identifies and supports small businesses. He highlighted that Platcorp's technical assistance is a key component of their strategy, which includes providing on-ground advice to farmers through agronomists and developing training programs in financial literacy, sustainable agricultural practices, and silage management.
Platcorp's technical assistance is designed to help farmers upscale their business and expand into seasonal crops. For farming loans, Platcorp's training programs are mandatory. The technical assistance aims to reduce the risk associated with farming loans by onboarding individuals during training.
The loan is expected to help businesses grow and create decent jobs, with a particular focus on women-owned enterprises and climate-resilient agriculture. Platcorp's philosophy is to only lend to individuals who will be better off after the loan, and they avoid over-indebting or exposing borrowers to high risks.
Swedfund's loan is supported up to 50% through an EU guarantee from the European Fund for Sustainable Development Plus (EFSD+) to accelerate financial inclusion. This is in line with Platcorp's mission to boost financial inclusion by offering loans that help micro, small, and medium-sized enterprises (MSMEs) grow, create jobs, and especially support women entrepreneurs and climate-smart agriculture.
Platcorp's subsidiaries, such as Platinum Credit, Premiere, and others, operate within the target countries, broadening the group's footprint and ability to serve diverse MSME needs across Kenya, Uganda, Tanzania, and Zambia. In 2024, Platcorp disbursed $306 million in loans to MSMEs, reaching over 88,000 customers and financing more than 37,000 farmers. Women represent 62% of the beneficiaries, with 27% youth and nearly half living in rural areas.
In summary, Platcorp Holdings Limited plays a crucial role in expanding formal financial services to underserved MSMEs in East and Southern Africa, contributing to economic empowerment, especially for women and rural populations, while supporting sustainable agriculture and economic growth.
[1] Platcorp Holdings Limited. (n.d.). Retrieved from https://www.platcorp.com/ [2] Swedfund. (n.d.). Retrieved from https://www.swedfund.se/ [3] European Investment Bank. (n.d.). Retrieved from https://www.eib.org/ [4] European Union. (n.d.). Retrieved from https://europa.eu/ [5] East African Business Week. (2021, May 17). Platcorp Holdings Limited Secures $10 Million Loan from Swedfund. Retrieved from https://www.eabw.net/platcorp-holdings-limited-secures-10-million-loan-from-swedfund/
- The secured $10 million debt deal between Platcorp Holdings Limited and Swedfund is part of Swedfund's mission to accelerate financial inclusion, contributing to closing the financing gap in East and Southern African countries.
- In alignment with Platcorp's focus on micro enterprises, the investment aims to help businesses grow, create decent jobs, and especially support women-owned enterprises and climate-resilient agriculture.
- Platcorp's approach to development finance includes providing technical assistance to farmers, offering training programs in financial literacy, sustainable agricultural practices, and silage management.
- Swedfund's loan to Platcorp is supported by a EU guarantee from the European Fund for Sustainable Development Plus (EFSD+), highlighting the blended finance model being used to invest in business growth and financial inclusion.
